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CBOT soyabeans tumble as S America overshadows USDA

CHICAGO: Soyabean futures at the Chicago Board of Trade tumbled on Friday as prospects for more rain drenching South America's soyabean ground overshadowed a reduction in the government's US supply outlook.

Soyabeans settled 5 to 7-3/4 cents per bushel lower, with March, the most-active contract, down 7-3/4 at $5.05-1/4.

Prices climbed early in response to the US Department of Agriculture's latest monthly supply and demand reports, in which the USDA hiked its projection for US soybean exports for 1999/2000 and subsequently reduced ending stocks.

But traders said focus quickly shifted back toward South America, where rainfall over the past two weeks has brought soybean acreage some relief from persistent dryness.

More moisture was ahead, meteorologists said. Weather Services Corp. projected scattered rains of 1/4 to 1 inch over the next 48 hours for the Cordoba, Santa Fe and northern Buenos Aires regions of Argentina.

For the key soybean growing state of Rio Grande do Sul in southern Brazil, Weather Services predicted scattered showers of 1/4 inch to 1 inch over the weekend.

"That probably became the overriding thing in the bean pit the talk of the rain," said John Janney, a trader with Salomon Smith Barney Inc. at the CBOT.

Brazil and Argentina are the world's second and third-leading soybean producing nations behind the United States.

Janney noted that much of Friday's soybean weakness was tied to selling by commodity funds, likely the liquidation of long positions. Funds have been holding a sizable net long position in soybean futures for several weeks.

Funds sold at least 1,500 soybean contracts on the day, floor sources said.

"Funds didn't really protect their positions," Janney said. "We had some liquidation of long positions before the weekend."

The USDA's supply and demand reports reflected improved foreign demand for US soyabeans, though supplies worldwide remain relatively high.

Projected US soybean stocks at the end of the current 1999/2000 marketing year were lowered 20 million bushels from a previous estimate, to 345 million. The USDA also raised estimated 1999/2000 US soybean exports by 25 million bushels to 890 million, up from 801 million in 1998/99.

The current stocks figure is below 1998/99 ending stocks of 348 million bushels.

For South America, the USDA cut Brazil's crop 500,000 tonnes to 30.5 million tonnes, but hiked Argentina's by the same amount, to 19.5 million. The USDA also raised its soybean export projections for both countries by a combined 600,000 tonnes.

In the trading pit, Carr Futures and Refco Inc. each sold 500 March contracts near the close. Up to late trading, Rand Financial Services sold 1,000 May contracts, Carr Futures sold 500 March, Refco Inc. sold 400 May and O'Connor & Co. bought 1,100 March Soyabeans futures volume during on Friday's pit session was estimated by the CBOT at 51,000 contracts, compared to 51,409 on Thursday.-Reuters